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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Sonoco Products Company | NYSE:SON | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 60.24 | 0 | 01:00:00 |
ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Incorporated under the laws
of South Carolina
|
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I.R.S. Employer Identification
No. 57-0248420
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
|
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¨
(do not check if a smaller reporting company)
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Smaller reporting company
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¨
|
|
|
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Emerging growth company
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¨
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Item 1.
|
||
|
|
|
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Condensed Consolidated Balance Sheets - July 2, 2017 (unaudited) and December 31, 2016 (unaudited)
|
|
|
|
|
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Condensed Consolidated Statements of Income – Three and Six Months Ended July 2, 2017 (unaudited) and July 3, 2016 (unaudited)
|
|
|
|
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Condensed Consolidated Statements of Comprehensive Income – Three and Six Months Ended July 2, 2017(unaudited) and July 3, 2016 (unaudited)
|
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|
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Condensed Consolidated Statements of Cash Flows – Six Months Ended July 2, 2017 (unaudited) and July 3, 2016 (unaudited)
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|
|
|
|
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||
|
|
|
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||
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Item 2.
|
||
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Item 3.
|
||
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|
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Item 4.
|
||
|
|
|
|
|
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Item 1.
|
||
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|
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Item 2.
|
||
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Item 6.
|
|
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July 2,
2017 |
|
December 31,
2016* |
||||
Assets
|
|
|
|
|
||||
Current Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
207,591
|
|
|
$
|
257,226
|
|
Trade accounts receivable, net of allowances
|
|
716,312
|
|
|
625,411
|
|
||
Other receivables
|
|
41,179
|
|
|
43,553
|
|
||
Inventories:
|
|
|
|
|
||||
Finished and in process
|
|
177,923
|
|
|
127,446
|
|
||
Materials and supplies
|
|
261,430
|
|
|
245,368
|
|
||
Prepaid expenses
|
|
60,542
|
|
|
49,764
|
|
||
|
|
1,464,977
|
|
|
1,348,768
|
|
||
Property, Plant and Equipment, Net
|
|
1,150,990
|
|
|
1,060,017
|
|
||
Goodwill
|
|
1,177,563
|
|
|
1,092,215
|
|
||
Other Intangible Assets, Net
|
|
274,319
|
|
|
224,958
|
|
||
Deferred Income Taxes
|
|
51,526
|
|
|
42,130
|
|
||
Other Assets
|
|
173,368
|
|
|
155,115
|
|
||
Total Assets
|
|
$
|
4,292,743
|
|
|
$
|
3,923,203
|
|
Liabilities and Equity
|
|
|
|
|
||||
Current Liabilities
|
|
|
|
|
||||
Payable to suppliers
|
|
$
|
525,816
|
|
|
$
|
477,831
|
|
Accrued expenses and other
|
|
252,537
|
|
|
273,996
|
|
||
Notes payable and current portion of long-term debt
|
|
117,064
|
|
|
32,045
|
|
||
Accrued taxes
|
|
10,690
|
|
|
18,744
|
|
||
|
|
906,107
|
|
|
802,616
|
|
||
Long-term Debt, Net of Current Portion
|
|
1,190,646
|
|
|
1,020,698
|
|
||
Pension and Other Postretirement Benefits
|
|
398,251
|
|
|
447,339
|
|
||
Deferred Income Taxes
|
|
76,967
|
|
|
59,753
|
|
||
Other Liabilities
|
|
38,980
|
|
|
38,092
|
|
||
Commitments and Contingencies
|
|
|
|
|
||||
Sonoco Shareholders’ Equity
|
|
|
|
|
||||
Common stock, no par value
|
|
|
|
|
||||
Authorized 300,000 shares
99,396 and 99,193 shares issued and outstanding at July 2, 2017 and December 31, 2016, respectively |
|
7,175
|
|
|
7,175
|
|
||
Capital in excess of stated value
|
|
322,045
|
|
|
321,050
|
|
||
Accumulated other comprehensive loss
|
|
(633,996
|
)
|
|
(738,380
|
)
|
||
Retained earnings
|
|
1,962,571
|
|
|
1,942,513
|
|
||
Total Sonoco Shareholders’ Equity
|
|
1,657,795
|
|
|
1,532,358
|
|
||
Noncontrolling Interests
|
|
23,997
|
|
|
22,347
|
|
||
Total Equity
|
|
1,681,792
|
|
|
1,554,705
|
|
||
Total Liabilities and Equity
|
|
$
|
4,292,743
|
|
|
$
|
3,923,203
|
|
*
|
The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
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July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||||||
Net sales
|
|
$
|
1,240,674
|
|
|
$
|
1,205,680
|
|
|
$
|
2,412,998
|
|
|
$
|
2,431,956
|
|
Cost of sales
|
|
1,004,799
|
|
|
963,667
|
|
|
1,956,901
|
|
|
1,944,690
|
|
||||
Gross profit
|
|
235,875
|
|
|
242,013
|
|
|
456,097
|
|
|
487,266
|
|
||||
Selling, general and administrative expenses
|
|
157,208
|
|
|
126,611
|
|
|
283,346
|
|
|
260,804
|
|
||||
Restructuring/Asset impairment charges
|
|
7,897
|
|
|
23,278
|
|
|
12,008
|
|
|
32,506
|
|
||||
Income before interest and income taxes
|
|
70,770
|
|
|
92,124
|
|
|
160,743
|
|
|
193,956
|
|
||||
Interest expense
|
|
13,823
|
|
|
14,092
|
|
|
26,908
|
|
|
28,281
|
|
||||
Interest income
|
|
1,031
|
|
|
548
|
|
|
2,058
|
|
|
950
|
|
||||
Income before income taxes
|
|
57,978
|
|
|
78,580
|
|
|
135,893
|
|
|
166,625
|
|
||||
Provision for income taxes
|
|
17,167
|
|
|
24,790
|
|
|
42,706
|
|
|
53,984
|
|
||||
Income before equity in earnings of affiliates
|
|
40,811
|
|
|
53,790
|
|
|
93,187
|
|
|
112,641
|
|
||||
Equity in earnings of affiliates, net of tax
|
|
2,845
|
|
|
2,928
|
|
|
4,799
|
|
|
4,267
|
|
||||
Net income
|
|
$
|
43,656
|
|
|
$
|
56,718
|
|
|
$
|
97,986
|
|
|
$
|
116,908
|
|
Net (income) attributable to noncontrolling interests
|
|
(531
|
)
|
|
(466
|
)
|
|
(1,128
|
)
|
|
(742
|
)
|
||||
Net income attributable to Sonoco
|
|
$
|
43,125
|
|
|
$
|
56,252
|
|
|
$
|
96,858
|
|
|
$
|
116,166
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
100,258
|
|
|
101,281
|
|
|
100,184
|
|
|
101,514
|
|
||||
Diluted
|
|
100,717
|
|
|
101,873
|
|
|
100,849
|
|
|
102,148
|
|
||||
Per common share:
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Sonoco:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.43
|
|
|
$
|
0.56
|
|
|
$
|
0.97
|
|
|
$
|
1.14
|
|
Diluted
|
|
$
|
0.43
|
|
|
$
|
0.55
|
|
|
$
|
0.96
|
|
|
$
|
1.14
|
|
Cash dividends
|
|
$
|
0.39
|
|
|
$
|
0.37
|
|
|
$
|
0.76
|
|
|
$
|
0.72
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||||||
Net income
|
|
$
|
43,656
|
|
|
$
|
56,718
|
|
|
$
|
97,986
|
|
|
$
|
116,908
|
|
Other comprehensive income/(loss):
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
|
29,526
|
|
|
(17,389
|
)
|
|
60,362
|
|
|
13,439
|
|
||||
Changes in defined benefit plans, net of tax
|
|
36,711
|
|
|
3,006
|
|
|
48,010
|
|
|
8,954
|
|
||||
Changes in derivative financial instruments, net of tax
|
|
(518
|
)
|
|
2,722
|
|
|
(3,467
|
)
|
|
4,622
|
|
||||
Other comprehensive income/(loss)
|
|
65,719
|
|
|
(11,661
|
)
|
|
104,905
|
|
|
27,015
|
|
||||
Comprehensive income
|
|
109,375
|
|
|
45,057
|
|
|
202,891
|
|
|
143,923
|
|
||||
Net (income) attributable to noncontrolling interests
|
|
(531
|
)
|
|
(466
|
)
|
|
(1,128
|
)
|
|
(742
|
)
|
||||
Other comprehensive loss (income) attributable to noncontrolling interests
|
|
159
|
|
|
(726
|
)
|
|
(521
|
)
|
|
(2,138
|
)
|
||||
Comprehensive income attributable to Sonoco
|
|
$
|
109,003
|
|
|
$
|
43,865
|
|
|
$
|
201,242
|
|
|
$
|
141,043
|
|
|
|
Six Months Ended
|
||||||
|
|
July 2,
2017 |
|
July 3,
2016 |
||||
Cash Flows from Operating Activities:
|
|
|
|
|
||||
Net income
|
|
$
|
97,986
|
|
|
$
|
116,908
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Asset impairment
|
|
1,486
|
|
|
4,199
|
|
||
Depreciation, depletion and amortization
|
|
103,649
|
|
|
105,530
|
|
||
Share-based compensation expense
|
|
5,682
|
|
|
9,665
|
|
||
Equity in earnings of affiliates
|
|
(4,799
|
)
|
|
(4,267
|
)
|
||
Cash dividends from affiliated companies
|
|
2,685
|
|
|
4,575
|
|
||
Net loss on disposition of assets
|
|
285
|
|
|
11,291
|
|
||
Pension and postretirement plan expense
|
|
55,160
|
|
|
22,244
|
|
||
Pension and postretirement plan contributions
|
|
(48,511
|
)
|
|
(35,647
|
)
|
||
Tax effect of share-based compensation exercises
|
|
—
|
|
|
1,290
|
|
||
Excess tax benefit of share-based compensation
|
|
—
|
|
|
(1,331
|
)
|
||
Net (decrease)/increase in deferred taxes
|
|
(9,487
|
)
|
|
3,613
|
|
||
Change in assets and liabilities, net of effects from acquisitions, dispositions, and foreign currency adjustments:
|
|
|
|
|
||||
Trade accounts receivable
|
|
(55,138
|
)
|
|
(40,357
|
)
|
||
Inventories
|
|
(12,795
|
)
|
|
(15,998
|
)
|
||
Payable to suppliers
|
|
11,884
|
|
|
(7,669
|
)
|
||
Prepaid expenses
|
|
(5,258
|
)
|
|
1,377
|
|
||
Accrued expenses
|
|
(29,289
|
)
|
|
(8,489
|
)
|
||
Income taxes payable and other income tax items
|
|
(13,089
|
)
|
|
12,197
|
|
||
Other assets and liabilities
|
|
3,831
|
|
|
6,918
|
|
||
Net cash provided by operating activities
|
|
104,282
|
|
|
186,049
|
|
||
Cash Flows from Investing Activities:
|
|
|
|
|
||||
Purchase of property, plant and equipment
|
|
(98,819
|
)
|
|
(98,774
|
)
|
||
Cost of acquisitions, net of cash acquired
|
|
(217,489
|
)
|
|
(863
|
)
|
||
Cash paid for disposition of assets
|
|
—
|
|
|
(8,436
|
)
|
||
Proceeds from the sale of assets
|
|
1,973
|
|
|
3,594
|
|
||
Investment in affiliates and other, net
|
|
268
|
|
|
169
|
|
||
Net cash used in investing activities
|
|
(314,067
|
)
|
|
(104,310
|
)
|
||
Cash Flows from Financing Activities:
|
|
|
|
|
||||
Proceeds from issuance of debt
|
|
180,363
|
|
|
186,926
|
|
||
Principal repayment of debt
|
|
(34,461
|
)
|
|
(248,817
|
)
|
||
Net change in commercial paper
|
|
87,000
|
|
|
14,000
|
|
||
Net increase in outstanding checks
|
|
1,195
|
|
|
5,255
|
|
||
Excess tax benefit of share-based compensation
|
|
—
|
|
|
1,331
|
|
||
Cash dividends
|
|
(75,604
|
)
|
|
(72,679
|
)
|
||
Shares acquired
|
|
(5,884
|
)
|
|
(42,125
|
)
|
||
Shares issued
|
|
—
|
|
|
632
|
|
||
Net cash provided by/(used in) financing activities
|
|
152,609
|
|
|
(155,477
|
)
|
||
Effects of Exchange Rate Changes on Cash
|
|
7,541
|
|
|
(948
|
)
|
||
Net Decrease in Cash and Cash Equivalents
|
|
(49,635
|
)
|
|
(74,686
|
)
|
||
Cash and cash equivalents at beginning of period
|
|
257,226
|
|
|
182,434
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
207,591
|
|
|
$
|
107,748
|
|
Trade accounts receivable
|
$
|
14,142
|
|
Inventories
|
42,924
|
|
|
Property, plant and equipment
|
53,787
|
|
|
Goodwill
|
67,951
|
|
|
Other intangible assets
|
61,490
|
|
|
Trade accounts payable
|
(22,286
|
)
|
|
Other net tangible assets /(liabilities)
|
(519
|
)
|
|
Net assets
|
$
|
217,489
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to Sonoco
|
|
$
|
43,125
|
|
|
$
|
56,252
|
|
|
$
|
96,858
|
|
|
$
|
116,166
|
|
Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
100,258
|
|
|
101,281
|
|
|
100,184
|
|
|
101,514
|
|
||||
Dilutive effect of stock-based compensation
|
|
459
|
|
|
592
|
|
|
665
|
|
|
634
|
|
||||
Diluted
|
|
100,717
|
|
|
101,873
|
|
|
100,849
|
|
|
102,148
|
|
||||
Net income attributable to Sonoco per common share:
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
0.43
|
|
|
$
|
0.56
|
|
|
$
|
0.97
|
|
|
$
|
1.14
|
|
Diluted
|
|
$
|
0.43
|
|
|
$
|
0.55
|
|
|
$
|
0.96
|
|
|
$
|
1.14
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||
|
|
|
|
|
|
|
|
|
||||
Anti-dilutive stock appreciation rights
|
|
532
|
|
|
—
|
|
|
444
|
|
|
715
|
|
|
|
2017
|
|
2016
|
||||||||||||
|
|
Second Quarter
|
|
Six Months
|
|
Second Quarter
|
|
Six Months
|
||||||||
Restructuring/Asset impairment:
|
|
|
|
|
|
|
|
|
||||||||
2017 Actions
|
|
$
|
3,884
|
|
|
$
|
6,188
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2016 Actions
|
|
729
|
|
|
1,884
|
|
|
19,632
|
|
|
26,045
|
|
||||
2015 and Earlier Actions
|
|
2,946
|
|
|
3,598
|
|
|
3,646
|
|
|
6,461
|
|
||||
Other asset impairments
|
|
338
|
|
|
338
|
|
|
—
|
|
|
—
|
|
||||
Restructuring/Asset impairment charges
|
|
$
|
7,897
|
|
|
$
|
12,008
|
|
|
$
|
23,278
|
|
|
$
|
32,506
|
|
Income tax benefit
|
|
$
|
(2,338
|
)
|
|
(3,636
|
)
|
|
$
|
(5,425
|
)
|
|
(8,345
|
)
|
||
Less: Costs attributable to noncontrolling interests, net of tax
|
|
(12
|
)
|
|
(14
|
)
|
|
(38
|
)
|
|
(45
|
)
|
||||
Restructuring/asset impairment charges attributable to Sonoco, net of tax
|
|
$
|
5,547
|
|
|
$
|
8,358
|
|
|
$
|
17,815
|
|
|
$
|
24,116
|
|
2017 Actions
|
|
Second Quarter 2017
|
|
Total
Incurred to Date |
|
Estimated
Total Cost |
||||||
Severance and Termination Benefits
|
|
|
|
|
|
|
||||||
Consumer Packaging
|
|
$
|
349
|
|
|
$
|
1,316
|
|
|
$
|
1,616
|
|
Display and Packaging
|
|
66
|
|
|
172
|
|
|
172
|
|
|||
Paper and Industrial Converted Products
|
|
1,663
|
|
|
$
|
2,204
|
|
|
2,204
|
|
||
Protective Solutions
|
|
899
|
|
|
974
|
|
|
1,124
|
|
|||
Corporate
|
|
—
|
|
|
456
|
|
|
456
|
|
|||
Asset Impairment / Disposal of Assets
|
|
|
|
|
|
|
||||||
Protective Solutions
|
|
777
|
|
|
777
|
|
|
777
|
|
|||
Other Costs
|
|
|
|
|
|
|
||||||
Consumer Packaging
|
|
92
|
|
|
251
|
|
|
251
|
|
|||
Paper and Industrial Converted Products
|
|
38
|
|
|
38
|
|
|
88
|
|
|||
Protective Solutions
|
|
—
|
|
|
—
|
|
|
700
|
|
|||
Total Charges and Adjustments
|
|
$
|
3,884
|
|
|
$
|
6,188
|
|
|
$
|
7,388
|
|
2017 Actions
|
|
Severance
and
Termination
Benefits |
|
Asset
Impairment/
Disposal
of Assets |
|
Other
Costs
|
|
Total
|
||||||||
Accrual Activity
2017 Year to Date |
|
|
|
|||||||||||||
Liability at December 31, 2016
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2017 charges
|
|
5,122
|
|
|
777
|
|
|
289
|
|
|
6,188
|
|
||||
Cash payments
|
|
(2,254
|
)
|
|
—
|
|
|
(289
|
)
|
|
(2,543
|
)
|
||||
Asset write downs/disposals
|
|
—
|
|
|
(777
|
)
|
|
—
|
|
|
(777
|
)
|
||||
Foreign currency translation
|
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||
Liability at July 2, 2017
|
|
$
|
2,877
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,877
|
|
|
|
2017
|
|
2016
|
|
Total
Incurred
to Date |
|
Estimated
Total Cost |
||||||||||||||||
2016 Actions
|
|
Second Quarter
|
|
Six Months
|
|
Second Quarter
|
|
Six Months
|
|
|
||||||||||||||
Severance and Termination Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consumer Packaging
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
487
|
|
|
$
|
1,452
|
|
|
$
|
2,408
|
|
|
$
|
2,408
|
|
Display and Packaging
|
|
17
|
|
|
4
|
|
|
1,277
|
|
|
2,653
|
|
|
4,308
|
|
|
4,308
|
|
||||||
Paper and Industrial Converted Products
|
|
316
|
|
|
414
|
|
|
1,730
|
|
|
4,141
|
|
|
6,301
|
|
|
6,301
|
|
||||||
Protective Solutions
|
|
1
|
|
|
—
|
|
|
38
|
|
|
360
|
|
|
678
|
|
|
678
|
|
||||||
Corporate
|
|
—
|
|
|
—
|
|
|
10
|
|
|
1,439
|
|
|
1,550
|
|
|
1,550
|
|
||||||
Asset Impairment / Disposal of Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consumer Packaging
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
(306
|
)
|
|
(306
|
)
|
|
(306
|
)
|
|||||
Display and Packaging
|
|
—
|
|
|
96
|
|
|
2,237
|
|
|
2,237
|
|
|
2,808
|
|
|
2,808
|
|
||||||
Paper and Industrial Converted Products
|
|
45
|
|
|
45
|
|
|
13,279
|
|
|
13,279
|
|
|
13,345
|
|
|
13,345
|
|
||||||
Other Costs
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consumer Packaging
|
|
$
|
28
|
|
|
28
|
|
|
104
|
|
|
302
|
|
|
759
|
|
|
759
|
|
|||||
Display and Packaging
|
|
139
|
|
|
368
|
|
|
11
|
|
|
11
|
|
|
654
|
|
|
704
|
|
||||||
Paper and Industrial Converted Products
|
|
188
|
|
|
878
|
|
|
459
|
|
|
477
|
|
|
2,176
|
|
|
2,226
|
|
||||||
Protective Solutions
|
|
(5
|
)
|
|
50
|
|
|
—
|
|
|
—
|
|
|
200
|
|
|
200
|
|
||||||
Total Charges and Adjustments
|
|
$
|
729
|
|
|
$
|
1,884
|
|
|
$
|
19,632
|
|
|
$
|
26,045
|
|
|
$
|
34,881
|
|
|
$
|
34,981
|
|
2016 Actions
|
|
Severance
and Termination Benefits |
|
Asset
Impairment/ Disposal of Assets |
|
Other
Costs |
|
Total
|
||||||||
Accrual Activity
2017 Year to Date
|
|
|
|
|
||||||||||||
Liability at December 31, 2016
|
|
$
|
3,558
|
|
|
$
|
—
|
|
|
$
|
640
|
|
|
$
|
4,198
|
|
2017 charges
|
|
419
|
|
|
141
|
|
|
1,324
|
|
|
1,884
|
|
||||
Adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Cash payments
|
|
(2,585
|
)
|
|
—
|
|
|
(1,271
|
)
|
|
(3,856
|
)
|
||||
Asset write downs/disposals
|
|
—
|
|
|
(141
|
)
|
|
(252
|
)
|
|
(393
|
)
|
||||
Foreign currency translation
|
|
9
|
|
|
—
|
|
|
21
|
|
|
30
|
|
||||
Liability at July 3, 2017
|
|
$
|
1,401
|
|
|
$
|
—
|
|
|
$
|
462
|
|
|
$
|
1,863
|
|
|
|
2017
|
|
2016
|
||||||||||||
2015 and Earlier Actions
|
|
Second Quarter
|
|
Six Months
|
|
Second Quarter
|
|
Six Months
|
||||||||
Consumer Packaging
|
|
$
|
2,591
|
|
|
$
|
2,564
|
|
|
$
|
2,982
|
|
|
$
|
5,137
|
|
Display and Packaging
|
|
—
|
|
|
83
|
|
|
560
|
|
|
566
|
|
||||
Paper and Industrial Converted Products
|
|
326
|
|
|
891
|
|
|
21
|
|
|
624
|
|
||||
Protective Solutions
|
|
29
|
|
|
53
|
|
|
83
|
|
|
134
|
|
||||
Corporate
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
||||
Total Charges and Adjustments
|
|
$
|
2,946
|
|
|
$
|
3,598
|
|
|
$
|
3,646
|
|
|
$
|
6,461
|
|
|
|
Gains and
Losses on Cash
Flow Hedges
|
|
Defined
Benefit
Pension Items
|
|
Foreign
Currency
Items
|
|
Accumulated
Other
Comprehensive
Loss
|
||||||||
Balance at December 31, 2016
|
|
$
|
1,939
|
|
|
$
|
(453,821
|
)
|
|
$
|
(286,498
|
)
|
|
$
|
(738,380
|
)
|
Other comprehensive income/(loss) before reclassifications
|
|
(2,220
|
)
|
|
18,117
|
|
|
59,841
|
|
|
75,738
|
|
||||
Amounts reclassified from accumulated other comprehensive loss to net income
|
|
(1,257
|
)
|
|
29,893
|
|
|
—
|
|
|
28,636
|
|
||||
Amounts reclassified from accumulated other comprehensive loss to fixed assets
|
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
Other comprehensive income/(loss)
|
|
(3,467
|
)
|
|
48,010
|
|
|
59,841
|
|
|
104,384
|
|
||||
Balance at July 2, 2017
|
|
$
|
(1,528
|
)
|
|
$
|
(405,811
|
)
|
|
$
|
(226,657
|
)
|
|
$
|
(633,996
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Balance at December 31, 2015
|
|
$
|
(5,152
|
)
|
|
$
|
(444,244
|
)
|
|
$
|
(253,137
|
)
|
|
$
|
(702,533
|
)
|
Other comprehensive income/(loss) before reclassifications
|
|
2,121
|
|
|
(3,190
|
)
|
|
13,439
|
|
|
12,370
|
|
||||
Amounts reclassified from accumulated other comprehensive loss to net income
|
|
2,523
|
|
|
12,144
|
|
|
—
|
|
|
14,667
|
|
||||
Amounts reclassified from accumulated other comprehensive loss to fixed assets
|
|
(22
|
)
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
||||
Other comprehensive income
|
|
4,622
|
|
|
8,954
|
|
|
13,439
|
|
|
27,015
|
|
||||
Balance at July 3, 2016
|
|
$
|
(530
|
)
|
|
$
|
(435,290
|
)
|
|
$
|
(239,698
|
)
|
|
$
|
(675,518
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Amount Reclassified from Accumulated
Other Comprehensive Loss
|
|
|
||||||||||||
|
|
Three Months Ended
|
Six Months Ended
|
|
|
|||||||||||
Details about Accumulated Other Comprehensive
Loss Components
|
|
July 2,
2017 |
July 3,
2016 |
July 2,
2017 |
|
July 3,
2016 |
|
Affected Line Item in
the Condensed Consolidated
Statements of Net Income
|
||||||||
Gains and losses on cash flow hedges
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts
|
|
$
|
2,243
|
|
$
|
(607
|
)
|
$
|
3,283
|
|
|
$
|
(2,847
|
)
|
|
Net sales
|
Foreign exchange contracts
|
|
(1,317
|
)
|
387
|
|
(2,042
|
)
|
|
1,432
|
|
|
Cost of sales
|
||||
Commodity contracts
|
|
463
|
|
(1,294
|
)
|
711
|
|
|
(2,805
|
)
|
|
Cost of sales
|
||||
|
|
1,389
|
|
(1,514
|
)
|
1,952
|
|
|
(4,220
|
)
|
|
Total before tax
|
||||
|
|
(497
|
)
|
505
|
|
(695
|
)
|
|
1,697
|
|
|
Tax benefit
|
||||
|
|
$
|
892
|
|
$
|
(1,009
|
)
|
$
|
1,257
|
|
|
$
|
(2,523
|
)
|
|
Net of tax
|
Defined benefit pension items
|
|
|
|
|
|
|
|
|
||||||||
Effect of settlement loss
(a)
|
|
$
|
(31,074
|
)
|
$
|
—
|
|
$
|
(31,074
|
)
|
|
$
|
—
|
|
|
Selling, general and
administrative |
Amortization of defined benefit pension items
(a)
|
|
(7,251
|
)
|
(7,368
|
)
|
(14,839
|
)
|
|
(14,511
|
)
|
|
Cost of sales
|
||||
Amortization of defined benefit pension items
(a)
|
|
(2,417
|
)
|
(2,456
|
)
|
(4,946
|
)
|
|
(4,837
|
)
|
|
Selling, general and
administrative |
||||
|
|
(40,742
|
)
|
(9,824
|
)
|
(50,859
|
)
|
|
(19,348
|
)
|
|
Total before tax
|
||||
|
|
17,224
|
|
3,628
|
|
20,966
|
|
|
7,204
|
|
|
Tax benefit
|
||||
|
|
$
|
(23,518
|
)
|
$
|
(6,196
|
)
|
$
|
(29,893
|
)
|
|
$
|
(12,144
|
)
|
|
Net of tax
|
Total reclassifications for the period
|
|
$
|
(22,626
|
)
|
$
|
(7,205
|
)
|
$
|
(28,636
|
)
|
|
$
|
(14,667
|
)
|
|
Net of tax
|
(a)
|
See Note 10 for additional details.
|
|
|
|
Three months ended July 2, 2017
|
|
Three months ended July 3, 2016
|
||||||||||||||||
|
|
|
Before Tax Amount
|
Tax (Expense) Benefit
|
After Tax Amount
|
|
Before Tax Amount
|
Tax (Expense) Benefit
|
After Tax Amount
|
||||||||||||
Foreign currency items
|
|
$
|
29,685
|
|
$
|
—
|
|
$
|
29,685
|
|
|
$
|
(17,389
|
)
|
$
|
—
|
|
$
|
(17,389
|
)
|
|
Defined benefit pension items:
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Other comprehensive income/(loss) before
reclassifications
|
|
19,168
|
|
(5,975
|
)
|
13,193
|
|
|
(5,395
|
)
|
2,205
|
|
(3,190
|
)
|
||||||
|
Amounts reclassified from accumulated other
comprehensive income/(loss) to net income
|
|
40,742
|
|
(17,224
|
)
|
23,518
|
|
|
9,824
|
|
(3,628
|
)
|
6,196
|
|
||||||
|
Net other comprehensive income/(loss) from
defined benefit pension items
|
|
59,910
|
|
(23,199
|
)
|
36,711
|
|
|
4,429
|
|
(1,423
|
)
|
3,006
|
|
||||||
Gains and losses on cash flow hedges:
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Other comprehensive income/(loss) before
reclassifications
|
|
602
|
|
(196
|
)
|
406
|
|
|
2,529
|
|
(819
|
)
|
1,710
|
|
||||||
|
Amounts reclassified from accumulated other
comprehensive income/(loss) to net income
|
|
(1,389
|
)
|
497
|
|
(892
|
)
|
|
1,514
|
|
(505
|
)
|
1,009
|
|
||||||
|
Amounts reclassified from accumulated other
comprehensive income/(loss) to fixed assets
|
|
(32
|
)
|
—
|
|
(32
|
)
|
|
3
|
|
—
|
|
3
|
|
||||||
|
Net other comprehensive income/(loss) from
cash flow hedges
|
|
(819
|
)
|
301
|
|
(518
|
)
|
|
4,046
|
|
(1,324
|
)
|
2,722
|
|
||||||
Other comprehensive income/(loss)
|
|
$
|
88,776
|
|
$
|
(22,898
|
)
|
$
|
65,878
|
|
|
$
|
(8,914
|
)
|
$
|
(2,747
|
)
|
$
|
(11,661
|
)
|
|
|
|
Six months ended July 2, 2017
|
|
Six months ended July 3, 2016
|
||||||||||||||||
|
|
|
Before Tax Amount
|
Tax (Expense) Benefit
|
After Tax Amount
|
|
Before Tax Amount
|
Tax (Expense) Benefit
|
After Tax Amount
|
||||||||||||
Foreign currency items
|
|
$
|
59,841
|
|
$
|
—
|
|
$
|
59,841
|
|
|
$
|
13,439
|
|
$
|
—
|
|
$
|
13,439
|
|
|
Defined benefit pension items:
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Other comprehensive income/(loss) before
reclassifications
|
|
19,021
|
|
(904
|
)
|
18,117
|
|
|
(5,395
|
)
|
2,205
|
|
(3,190
|
)
|
||||||
|
Amounts reclassified from accumulated other
comprehensive income/(loss) to net income
|
|
50,859
|
|
(20,966
|
)
|
29,893
|
|
|
19,348
|
|
(7,204
|
)
|
12,144
|
|
||||||
|
Net other comprehensive income/(loss) from
defined benefit pension items
|
|
69,880
|
|
(21,870
|
)
|
48,010
|
|
|
13,953
|
|
(4,999
|
)
|
8,954
|
|
||||||
Gains and losses on cash flow hedges:
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Other comprehensive income/(loss) before
reclassifications
|
|
(3,446
|
)
|
1,226
|
|
(2,220
|
)
|
|
3,130
|
|
(1,009
|
)
|
2,121
|
|
||||||
|
Amounts reclassified from accumulated other
comprehensive income/(loss) to net income
|
|
(1,952
|
)
|
695
|
|
(1,257
|
)
|
|
4,220
|
|
(1,697
|
)
|
2,523
|
|
||||||
|
Amounts reclassified from accumulated other
comprehensive income/(loss) to fixed assets
|
|
10
|
|
—
|
|
10
|
|
|
(22
|
)
|
—
|
|
(22
|
)
|
||||||
|
Net other comprehensive income/(loss) from
cash flow hedges
|
|
(5,388
|
)
|
1,921
|
|
(3,467
|
)
|
|
7,328
|
|
(2,706
|
)
|
4,622
|
|
||||||
Other comprehensive income/(loss)
|
|
$
|
124,333
|
|
$
|
(19,949
|
)
|
$
|
104,384
|
|
|
$
|
34,720
|
|
$
|
(7,705
|
)
|
$
|
27,015
|
|
|
|
Consumer
Packaging
|
|
Display
and
Packaging
|
|
Paper and
Industrial
Converted
Products
|
Protective
Solutions
|
|
Total
|
||||||||||
Goodwill at December 31, 2016
|
|
$
|
435,590
|
|
|
$
|
203,414
|
|
|
$
|
221,983
|
|
$
|
231,228
|
|
|
$
|
1,092,215
|
|
Acquisitions
|
|
67,951
|
|
|
—
|
|
|
—
|
|
—
|
|
|
67,951
|
|
|||||
Foreign currency translation
|
|
10,154
|
|
|
—
|
|
|
7,194
|
|
603
|
|
|
17,951
|
|
|||||
Other
|
|
(715
|
)
|
|
—
|
|
|
—
|
|
161
|
|
|
(554
|
)
|
|||||
Goodwill at July 2, 2017
|
|
$
|
512,980
|
|
|
$
|
203,414
|
|
|
$
|
229,177
|
|
$
|
231,992
|
|
|
$
|
1,177,563
|
|
|
|
July 2,
2017 |
|
December 31,
2016 |
||||
Other Intangible Assets, gross:
|
|
|
|
|
||||
Patents
|
|
$
|
22,456
|
|
|
$
|
13,164
|
|
Customer lists
|
|
418,927
|
|
|
362,162
|
|
||
Trade names
|
|
22,991
|
|
|
19,902
|
|
||
Proprietary technology
|
|
20,756
|
|
|
20,721
|
|
||
Land use rights
|
|
293
|
|
|
288
|
|
||
Other
|
|
1,725
|
|
|
1,701
|
|
||
Other Intangible Assets, gross
|
|
$
|
487,148
|
|
|
$
|
417,938
|
|
|
|
|
|
|
||||
Accumulated Amortization:
|
|
|
|
|
||||
Patents
|
|
(5,870
|
)
|
|
(5,647
|
)
|
||
Customer lists
|
|
(190,459
|
)
|
|
(172,292
|
)
|
||
Trade names
|
|
(3,110
|
)
|
|
(2,733
|
)
|
||
Proprietary technology
|
|
(12,221
|
)
|
|
(11,236
|
)
|
||
Land use rights
|
|
(44
|
)
|
|
(41
|
)
|
||
Other
|
|
(1,125
|
)
|
|
(1,031
|
)
|
||
Total Accumulated Amortization
|
|
$
|
(212,829
|
)
|
|
$
|
(192,980
|
)
|
Other Intangible Assets, net
|
|
$
|
274,319
|
|
|
$
|
224,958
|
|
|
|
July 2, 2017
|
|
December 31, 2016
|
||||||||||||
|
|
Carrying
Amount
|
|
Fair
Value
|
|
Carrying
Amount
|
|
Fair
Value
|
||||||||
Long-term debt, net of current portion
|
|
$
|
1,190,646
|
|
|
$
|
1,317,654
|
|
|
$
|
1,020,698
|
|
|
$
|
1,116,336
|
|
Currency
|
Action
|
Quantity
|
|
Colombian peso
|
purchase
|
1,073,625
|
|
Mexican peso
|
purchase
|
300,067
|
|
Canadian dollar
|
purchase
|
28,244
|
|
Turkish lira
|
purchase
|
6,327
|
|
Russian ruble
|
purchase
|
3,733
|
|
British pound
|
purchase
|
2,489
|
|
New Zealand dollar
|
sell
|
(340
|
)
|
Australian dollar
|
sell
|
(417
|
)
|
Euro
|
sell
|
(1,350
|
)
|
Polish zloty
|
sell
|
(1,513
|
)
|
Currency
|
Action
|
Quantity
|
|
Colombian peso
|
purchase
|
3,049,889
|
|
Mexican peso
|
purchase
|
233,791
|
|
Canadian dollar
|
purchase
|
18,625
|
|
Description
|
|
Balance Sheet Location
|
|
July 2,
2017 |
|
December 31,
2016 |
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
||||
Commodity Contracts
|
|
Prepaid expenses
|
|
$
|
1,795
|
|
|
$
|
3,240
|
|
Commodity Contracts
|
|
Other assets
|
|
$
|
58
|
|
|
$
|
527
|
|
Commodity Contracts
|
|
Accrued expenses and other
|
|
$
|
(235
|
)
|
|
$
|
(89
|
)
|
Commodity Contracts
|
|
Other liabilities
|
|
$
|
(199
|
)
|
|
$
|
(42
|
)
|
Foreign Exchange Contracts
|
|
Prepaid expenses
|
|
$
|
113
|
|
|
$
|
761
|
|
Foreign Exchange Contracts
|
|
Accrued expenses and other
|
|
$
|
(3,594
|
)
|
|
$
|
(946
|
)
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
||||
Foreign Exchange Contracts
|
|
Prepaid expenses
|
|
$
|
12
|
|
|
$
|
194
|
|
Foreign Exchange Contracts
|
|
Accrued expenses and other
|
|
$
|
(828
|
)
|
|
$
|
(890
|
)
|
Description
|
|
Amount of Gain or
(Loss) Recognized
in OCI on
Derivatives
(Effective Portion)
|
|
Location of Gain
or (Loss)
Reclassified from
Accumulated OCI
Into Income
(Effective Portion)
|
|
Amount of Gain or
(Loss) Reclassified
from Accumulated
OCI Into Income
(Effective Portion)
|
|
Location of Gain
or (Loss) Recognized in
Income on
Derivatives
(Ineffective Portion)
|
|
Amount of Gain
or (Loss)
Recognized
in Income on
Derivatives (Ineffective
Portion)
|
||||||
Derivatives in Cash Flow Hedging Relationships:
|
|
|
|
|
|
|
||||||||||
Three months ended July 2, 2017
|
|
|
|
|
|
|
|
|
||||||||
Foreign Exchange Contracts
|
$
|
509
|
|
|
Net sales
|
|
$
|
2,243
|
|
|
Net sales
|
|
$
|
—
|
|
|
|
|
|
|
Cost of sales
|
|
$
|
(1,317
|
)
|
|
|
|
|
||||
Commodity Contracts
|
$
|
93
|
|
|
Cost of sales
|
|
$
|
463
|
|
|
Cost of sales
|
|
$
|
135
|
|
|
Three months ended July 3, 2016
|
|
|
|
|
|
|
|
|
||||||||
Foreign Exchange Contracts
|
$
|
(797
|
)
|
|
Net sales
|
|
$
|
(607
|
)
|
|
Net sales
|
|
$
|
—
|
|
|
|
|
|
|
Cost of sales
|
|
$
|
387
|
|
|
|
|
|
||||
Commodity Contracts
|
$
|
3,249
|
|
|
Cost of sales
|
|
$
|
(1,294
|
)
|
|
Cost of sales
|
|
$
|
(108
|
)
|
Description
|
Location of Gain or (Loss) Recognized in
Income Statement
|
Gain or (Loss)
Recognized
|
||
Derivatives not Designated as Hedging Instruments:
|
|
|||
Three months ended July 2, 2017
|
|
|
||
Foreign Exchange Contracts
|
Cost of sales
|
$
|
—
|
|
|
Selling, general and administrative
|
$
|
1,665
|
|
Three months ended July 3, 2016
|
|
|
||
Foreign Exchange Contracts
|
Cost of sales
|
$
|
—
|
|
|
Selling, general and administrative
|
$
|
1,352
|
|
Description
|
|
Amount of Gain or
(Loss) Recognized
in OCI on
Derivatives
(Effective Portion)
|
|
Location of Gain
or (Loss)
Reclassified from
Accumulated OCI
Into Income
(Effective Portion)
|
|
Amount of Gain or
(Loss) Reclassified
from Accumulated
OCI Into Income
(Effective Portion)
|
|
Location of Gain
or (Loss)
Recognized in
Income on
Derivatives
(Ineffective Portion)
|
|
Amount of Gain
or (Loss) Recognized
in Income on
Derivatives
(Ineffective
Portion)
|
||||||
Derivatives in Cash Flow Hedging Relationships:
|
|
|
|
|
|
|
||||||||||
Six months ended July 2, 2017
|
|
|
|
|
|
|
|
|
||||||||
Foreign Exchange Contracts
|
|
$
|
(2,183
|
)
|
|
Net sales
|
|
$
|
3,283
|
|
|
Net sales
|
|
$
|
—
|
|
|
|
|
|
Cost of sales
|
|
$
|
(2,042
|
)
|
|
|
|
|
||||
Commodity Contracts
|
|
$
|
(1,263
|
)
|
|
Cost of sales
|
|
$
|
711
|
|
|
Cost of sales
|
|
$
|
(200
|
)
|
Six months ended July 3, 2016
|
|
|
|
|
|
|
|
|
||||||||
Foreign Exchange Contracts
|
|
$
|
1,570
|
|
|
Net sales
|
|
$
|
(2,847
|
)
|
|
Net sales
|
|
$
|
—
|
|
|
|
|
|
Cost of sales
|
|
$
|
1,432
|
|
|
|
|
|
||||
Commodity Contracts
|
|
$
|
1,516
|
|
|
Cost of sales
|
|
$
|
(2,805
|
)
|
|
Cost of sales
|
|
$
|
2
|
|
Description
|
Location of Gain or (Loss) Recognized in
Income Statement
|
Gain or (Loss)
Recognized
|
||
Derivatives not Designated as Hedging Instruments:
|
|
|||
Six months ended July 2, 2017
|
|
|
||
Foreign Exchange Contracts
|
Cost of sales
|
$
|
—
|
|
|
Selling, general and administrative
|
$
|
1,098
|
|
Six months ended July 3, 2016
|
|
|
||
Foreign Exchange Contracts
|
Cost of sales
|
$
|
—
|
|
|
Selling, general and administrative
|
$
|
1,116
|
|
Level 1 –
|
Observable inputs such as quoted market prices in active markets;
|
Level 2 –
|
Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
|
Level 3 –
|
Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.
|
Description
|
|
July 2,
2017 |
|
Assets measured at NAV
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Hedge derivatives, net:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity contracts
|
|
$
|
1,419
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
1,419
|
|
|
$
|
—
|
|
Foreign exchange contracts
|
|
$
|
(3,481
|
)
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
(3,481
|
)
|
|
$
|
—
|
|
Non-hedge derivatives, net:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign exchange contracts
|
|
$
|
(816
|
)
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
(816
|
)
|
|
$
|
—
|
|
Deferred compensation plan assets
|
|
$
|
374
|
|
|
$
|
—
|
|
$
|
374
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Description
|
|
December 31,
2016 |
|
Assets measured at NAV
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Hedge derivatives, net:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commodity contracts
|
|
$
|
3,636
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
3,636
|
|
|
$
|
—
|
|
Foreign exchange contracts
|
|
$
|
(185
|
)
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
(185
|
)
|
|
$
|
—
|
|
Non-hedge derivatives, net:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign exchange contracts
|
|
$
|
(696
|
)
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
(696
|
)
|
|
$
|
—
|
|
Deferred compensation plan assets
|
|
$
|
349
|
|
|
$
|
—
|
|
$
|
349
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||||||
Retirement Plans
|
|
|
|
|
|
|
||||||||||
Service cost
|
|
$
|
4,497
|
|
|
$
|
4,799
|
|
|
$
|
9,209
|
|
|
$
|
9,822
|
|
Interest cost
|
|
13,668
|
|
|
14,984
|
|
|
28,369
|
|
|
30,310
|
|
||||
Expected return on plan assets
|
|
(19,698
|
)
|
|
(21,388
|
)
|
|
(40,536
|
)
|
|
(43,432
|
)
|
||||
Amortization of prior service cost
|
|
224
|
|
|
188
|
|
|
455
|
|
|
381
|
|
||||
Amortization of net actuarial loss
|
|
9,792
|
|
|
9,960
|
|
|
19,960
|
|
|
19,556
|
|
||||
Effect of settlement loss
|
|
31,074
|
|
|
—
|
|
|
31,074
|
|
|
—
|
|
||||
Net periodic benefit cost
|
|
$
|
39,557
|
|
|
$
|
8,543
|
|
|
$
|
48,531
|
|
|
$
|
16,637
|
|
Retiree Health and Life Insurance Plans
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
80
|
|
|
71
|
|
|
164
|
|
|
156
|
|
||||
Interest cost
|
|
104
|
|
|
114
|
|
|
224
|
|
|
244
|
|
||||
Expected return on plan assets
|
|
(406
|
)
|
|
(394
|
)
|
|
(820
|
)
|
|
(798
|
)
|
||||
Amortization of prior service credit
|
|
(123
|
)
|
|
(124
|
)
|
|
(250
|
)
|
|
(252
|
)
|
||||
Amortization of net actuarial gain
|
|
(225
|
)
|
|
(200
|
)
|
|
(380
|
)
|
|
(337
|
)
|
||||
Net periodic benefit income
|
|
$
|
(570
|
)
|
|
$
|
(533
|
)
|
|
$
|
(1,062
|
)
|
|
$
|
(987
|
)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
July 2,
2017 |
|
July 3,
2016 |
|
July 2,
2017 |
|
July 3,
2016 |
||||||||
Net sales:
|
|
|
|
|
|
|
|
|
||||||||
Consumer Packaging
|
|
$
|
521,262
|
|
|
$
|
511,007
|
|
|
$
|
1,003,443
|
|
|
$
|
1,038,345
|
|
Display and Packaging
|
|
115,612
|
|
|
130,874
|
|
|
230,247
|
|
|
275,141
|
|
||||
Paper and Industrial Converted Products
|
|
469,197
|
|
|
433,342
|
|
|
911,699
|
|
|
856,416
|
|
||||
Protective Solutions
|
|
134,603
|
|
|
130,457
|
|
|
267,609
|
|
|
262,054
|
|
||||
Consolidated
|
|
$
|
1,240,674
|
|
|
$
|
1,205,680
|
|
|
$
|
2,412,998
|
|
|
$
|
2,431,956
|
|
Intersegment sales:
|
|
|
|
|
|
|
|
|
||||||||
Consumer Packaging
|
|
$
|
1,353
|
|
|
$
|
1,596
|
|
|
$
|
2,576
|
|
|
$
|
2,928
|
|
Display and Packaging
|
|
824
|
|
|
626
|
|
|
1,574
|
|
|
1,123
|
|
||||
Paper and Industrial Converted Products
|
|
36,680
|
|
|
23,536
|
|
|
65,053
|
|
|
49,917
|
|
||||
Protective Solutions
|
|
519
|
|
|
286
|
|
|
918
|
|
|
872
|
|
||||
Consolidated
|
|
$
|
39,376
|
|
|
$
|
26,044
|
|
|
$
|
70,121
|
|
|
$
|
54,840
|
|
Income before interest and income taxes:
|
|
|
|
|
|
|
|
|
||||||||
Segment operating profit:
|
|
|
|
|
|
|
|
|
||||||||
Consumer Packaging
|
|
$
|
59,063
|
|
|
$
|
59,509
|
|
|
$
|
117,073
|
|
|
$
|
122,374
|
|
Display and Packaging
|
|
1,444
|
|
|
5,030
|
|
|
4,627
|
|
|
8,311
|
|
||||
Paper and Industrial Converted Products
|
|
43,513
|
|
|
37,480
|
|
|
68,236
|
|
|
70,779
|
|
||||
Protective Solutions
|
|
10,952
|
|
|
14,220
|
|
|
21,813
|
|
|
26,246
|
|
||||
Restructuring/Asset impairment charges
|
|
(7,897
|
)
|
|
(23,278
|
)
|
|
(12,008
|
)
|
|
(32,506
|
)
|
||||
Other, net
|
|
(36,305
|
)
|
|
(837
|
)
|
|
(38,998
|
)
|
|
(1,248
|
)
|
||||
Consolidated
|
|
$
|
70,770
|
|
|
$
|
92,124
|
|
|
$
|
160,743
|
|
|
$
|
193,956
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
availability and supply of raw materials, and offsetting high raw material costs, including the impact of potential changes in tariffs;
|
•
|
improved productivity and cost containment;
|
•
|
improving margins and leveraging strong cash flow and financial position;
|
•
|
effects of acquisitions and dispositions;
|
•
|
realization of synergies resulting from acquisitions;
|
•
|
costs, timing and effects of restructuring activities;
|
•
|
adequacy and anticipated amounts and uses of cash flows;
|
•
|
expected amounts of capital spending;
|
•
|
refinancing and repayment of debt;
|
•
|
financial strategies and the results expected of them;
|
•
|
financial results for future periods;
|
•
|
producing improvements in earnings;
|
•
|
profitable sales growth and rates of growth;
|
•
|
market leadership;
|
•
|
research and development spending;
|
•
|
extent of, and adequacy of provisions for, environmental liabilities;
|
•
|
adequacy of income tax provisions, realization of deferred tax assets, outcomes of uncertain tax issues and tax rates;
|
•
|
goodwill impairment charges and fair values of reporting units;
|
•
|
future asset impairment charges and fair values of assets;
|
•
|
anticipated contributions to pension and postretirement benefit plans, fair values of plan assets, long-term rates of return on plan assets, and projected benefit obligations and payments;
|
•
|
creation of long-term value and returns for shareholders;
|
•
|
continued payment of dividends; and
|
•
|
planned stock repurchases.
|
•
|
availability and pricing of raw materials, energy and transportation, including the impact of potential changes in tariffs, and the Company's ability to pass raw material, energy and transportation price increases and surcharges through to customers or otherwise manage these commodity pricing risks;
|
•
|
costs of labor;
|
•
|
work stoppages due to labor disputes;
|
•
|
success of new product development, introduction and sales;
|
•
|
consumer demand for products and changing consumer preferences;
|
•
|
ability to be the low-cost global leader in customer-preferred packaging solutions within targeted segments;
|
•
|
competitive pressures, including new product development, industry overcapacity, and changes in competitors' pricing for products;
|
•
|
ability to maintain or increase productivity levels, contain or reduce costs, and maintain positive price/cost relationships;
|
•
|
ability to negotiate or retain contracts with customers, including in segments with concentration of sales volume;
|
•
|
ability to improve margins and leverage cash flows and financial position;
|
•
|
continued strength of our paperboard-based tubes and cores and composite can operations;
|
•
|
ability to manage the mix of business to take advantage of growing markets while reducing cyclical effects of some of the Company's existing businesses on operating results;
|
•
|
ability to maintain innovative technological market leadership and a reputation for quality;
|
•
|
ability to profitably maintain and grow existing domestic and international business and market share;
|
•
|
ability to expand geographically and win profitable new business;
|
•
|
ability to identify and successfully close suitable acquisitions at the levels needed to meet growth targets, and successfully integrate newly acquired businesses into the Company's operations;
|
•
|
the costs, timing and results of restructuring activities;
|
•
|
availability of credit to us, our customers and suppliers in needed amounts and on reasonable terms;
|
•
|
effects of our indebtedness on our cash flow and business activities;
|
•
|
fluctuations in obligations and earnings of pension and postretirement benefit plans;
|
•
|
accuracy of assumptions underlying projections of benefit plan obligations and payments, valuation of plan assets, and projections of long-term rates of return;
|
•
|
cost of employee and retiree medical, health and life insurance benefits;
|
•
|
resolution of income tax contingencies;
|
•
|
foreign currency exchange rate fluctuations, interest rate and commodity price risk and the effectiveness of related hedges;
|
•
|
changes in U.S. and foreign tax rates, and tax laws, regulations and interpretations thereof;
|
•
|
accuracy in valuation of deferred tax assets;
|
•
|
accuracy of assumptions underlying projections related to goodwill impairment testing, and accuracy of management's assessment of goodwill impairment;
|
•
|
accuracy of assumptions underlying fair value measurements, accuracy of management's assessments of fair value and fluctuations in fair value;
|
•
|
liability for and anticipated costs of environmental remediation actions;
|
•
|
effects of environmental laws and regulations;
|
•
|
operational disruptions at our major facilities;
|
•
|
failure or disruptions in our information technologies;
|
•
|
loss of consumer or investor confidence;
|
•
|
ability to protect our intellectual property rights;
|
•
|
actions of domestic or foreign government agencies and changes in laws and regulations affecting the Company;
|
•
|
international, national and local economic and market conditions and levels of unemployment; and
|
•
|
economic disruptions resulting from terrorist activities and natural disasters.
|
|
|
For the three months ended July 3, 2016
|
||||||||||||||
Dollars in thousands, except per share data
|
|
GAAP
|
|
Restructuring/
Asset Impairment |
|
Other
Adjustments (1) |
|
Base
|
||||||||
Income before interest and income taxes
|
|
$
|
92,124
|
|
|
$
|
23,278
|
|
|
$
|
837
|
|
|
$
|
116,239
|
|
Interest expense, net
|
|
13,544
|
|
|
—
|
|
|
—
|
|
|
13,544
|
|
||||
Income before income taxes
|
|
78,580
|
|
|
23,278
|
|
|
837
|
|
|
102,695
|
|
||||
Provision for income taxes
|
|
24,790
|
|
|
5,425
|
|
|
233
|
|
|
30,448
|
|
||||
Income before equity in earnings of affiliates
|
|
53,790
|
|
|
17,853
|
|
|
604
|
|
|
72,247
|
|
||||
Equity in earnings of affiliates, net of tax
|
|
2,928
|
|
|
—
|
|
|
—
|
|
|
2,928
|
|
||||
Net income
|
|
56,718
|
|
|
17,853
|
|
|
604
|
|
|
75,175
|
|
||||
Net (income) attributable to noncontrolling interests
|
|
(466
|
)
|
|
(38
|
)
|
|
—
|
|
|
(504
|
)
|
||||
Net income attributable to Sonoco
|
|
$
|
56,252
|
|
|
$
|
17,815
|
|
|
$
|
604
|
|
|
$
|
74,671
|
|
Per diluted common share*
|
|
$
|
0.55
|
|
|
$
|
0.17
|
|
|
$
|
0.01
|
|
|
$
|
0.73
|
|
*Due to rounding individual items may not sum across
|
|
|
|
|
|
|
|
($ in millions)
|
||
Volume/mix
|
$
|
(23
|
)
|
Selling prices
|
51
|
|
|
Acquisitions and Divestitures
|
16
|
|
|
Foreign currency translation and other, net
|
(9
|
)
|
|
|
|
||
Total sales increase
|
$
|
35
|
|
|
|
|
|
Three Months Ended
|
|||||||||
|
|
July 2,
2017 |
|
July 3,
2016 |
|
% Change
|
|||||
Net sales:
|
|
|
|
|
|
|
|||||
Consumer Packaging
|
|
$
|
521,262
|
|
|
$
|
511,007
|
|
|
2.0
|
%
|
Display and Packaging
|
|
115,612
|
|
|
130,874
|
|
|
(11.7
|
)%
|
||
Paper and Industrial Converted Products
|
|
469,197
|
|
|
433,342
|
|
|
8.3
|
%
|
||
Protective Solutions
|
|
134,603
|
|
|
130,457
|
|
|
3.2
|
%
|
||
Consolidated
|
|
$
|
1,240,674
|
|
|
$
|
1,205,680
|
|
|
2.9
|
%
|
|
|
Three Months Ended
|
|||||||||
|
|
July 2,
2017 |
|
July 3,
2016 |
|
% Change
|
|||||
Income before interest and income taxes:
|
|
|
|
|
|
|
|||||
Segment operating profit:
|
|
|
|
|
|
|
|||||
Consumer Packaging
|
|
$
|
59,063
|
|
|
$
|
59,509
|
|
|
(0.7
|
)%
|
Display and Packaging
|
|
1,444
|
|
|
5,030
|
|
|
(71.3
|
)%
|
||
Paper and Industrial Converted Products
|
|
43,513
|
|
|
37,480
|
|
|
16.1
|
%
|
||
Protective Solutions
|
|
10,952
|
|
|
14,220
|
|
|
(23.0
|
)%
|
||
Restructuring/Asset impairment charges
|
|
(7,897
|
)
|
|
(23,278
|
)
|
|
|
|
||
Other, net
|
|
(36,305
|
)
|
|
(837
|
)
|
|
|
|
||
Consolidated
|
|
$
|
70,770
|
|
|
$
|
92,124
|
|
|
(23.2
|
)%
|
|
|
Three Months Ended
|
||||||
|
|
July 2,
2017 |
|
July 3,
2016 |
||||
Restructuring/Asset impairment charges:
|
|
|
|
|
||||
Consumer Packaging
|
|
$
|
3,060
|
|
|
$
|
3,573
|
|
Display and Packaging
|
|
222
|
|
|
4,085
|
|
||
Paper and Industrial Converted Products
|
|
2,914
|
|
|
15,489
|
|
||
Protective Solutions
|
|
1,701
|
|
|
121
|
|
||
Corporate
|
|
—
|
|
|
10
|
|
||
Total
|
|
$
|
7,897
|
|
|
$
|
23,278
|
|
|
|
For the six months ended July 3, 2017
|
||||||||||||||
Dollars in thousands, except per share data
|
|
GAAP
|
|
Restructuring/
Asset Impairment |
|
Other
Adjustments (1) |
|
Base
|
||||||||
Income before interest and income taxes
|
|
$
|
160,743
|
|
|
$
|
12,008
|
|
|
$
|
38,998
|
|
|
$
|
211,749
|
|
Interest expense, net
|
|
24,850
|
|
|
—
|
|
|
—
|
|
|
24,850
|
|
||||
Income before income taxes
|
|
135,893
|
|
|
12,008
|
|
|
38,998
|
|
|
186,899
|
|
||||
Provision for income taxes
|
|
42,706
|
|
|
3,636
|
|
|
12,506
|
|
|
58,848
|
|
||||
Income before equity in earnings of affiliates
|
|
93,187
|
|
|
8,372
|
|
|
26,492
|
|
|
128,051
|
|
||||
Equity in earnings of affiliates, net of tax
|
|
4,799
|
|
|
—
|
|
|
—
|
|
|
4,799
|
|
||||
Net income
|
|
97,986
|
|
|
8,372
|
|
|
26,492
|
|
|
132,850
|
|
||||
Net (income) attributable to noncontrolling interests
|
|
(1,128
|
)
|
|
(14
|
)
|
|
—
|
|
|
(1,142
|
)
|
||||
Net income attributable to Sonoco
|
|
$
|
96,858
|
|
|
$
|
8,358
|
|
|
$
|
26,492
|
|
|
$
|
131,708
|
|
Per diluted common share*
|
|
$
|
0.96
|
|
|
$
|
0.08
|
|
|
$
|
0.26
|
|
|
$
|
1.31
|
|
*Due to rounding individual items may not sum across
|
|
|
|
|
|
|
|
($ in millions)
|
||
Volume/mix
|
$
|
(53
|
)
|
Selling prices
|
84
|
|
|
Acquisitions and Divestitures
|
(18
|
)
|
|
Foreign currency translation and other, net
|
(32
|
)
|
|
|
|
||
Total sales decrease
|
$
|
(19
|
)
|
|
|
|
|
Six Months Ended
|
|||||||||
|
|
July 2,
2017 |
|
July 3,
2016 |
|
% Change
|
|||||
Net sales:
|
|
|
|
|
|
|
|||||
Consumer Packaging
|
|
$
|
1,003,443
|
|
|
$
|
1,038,345
|
|
|
(3.4
|
)%
|
Display and Packaging
|
|
230,247
|
|
|
275,141
|
|
|
(16.3
|
)%
|
||
Paper and Industrial Converted Products
|
|
911,699
|
|
|
856,416
|
|
|
6.5
|
%
|
||
Protective Solutions
|
|
267,609
|
|
|
262,054
|
|
|
2.1
|
%
|
||
Consolidated
|
|
$
|
2,412,998
|
|
|
$
|
2,431,956
|
|
|
(0.8
|
)%
|
|
|
Six Months Ended
|
|||||||||
|
|
July 2,
2017 |
|
July 3,
2016 |
|
% Change
|
|||||
Income before interest and income taxes:
|
|
|
|
|
|
|
|||||
Segment operating profit:
|
|
|
|
|
|
|
|||||
Consumer Packaging
|
|
$
|
117,073
|
|
|
$
|
122,374
|
|
|
(4.3
|
)%
|
Display and Packaging
|
|
4,627
|
|
|
8,311
|
|
|
(44.3
|
)%
|
||
Paper and Industrial Converted Products
|
|
68,236
|
|
|
70,779
|
|
|
(3.6
|
)%
|
||
Protective Solutions
|
|
21,813
|
|
|
26,246
|
|
|
(16.9
|
)%
|
||
Restructuring/Asset impairment charges
|
|
(12,008
|
)
|
|
(32,506
|
)
|
|
|
|
||
Other, net
|
|
(38,998
|
)
|
|
(1,248
|
)
|
|
|
|||
Consolidated
|
|
$
|
160,743
|
|
|
$
|
193,956
|
|
|
(17.1
|
)%
|
|
|
Six Months Ended
|
||||||
|
|
July 2,
2017 |
|
July 3,
2016 |
||||
Restructuring/Asset impairment charges:
|
|
|
|
|
||||
Consumer Packaging
|
|
$
|
4,160
|
|
|
$
|
6,585
|
|
Display and Packaging
|
|
723
|
|
|
5,467
|
|
||
Paper and Industrial Converted Products
|
|
4,808
|
|
|
18,521
|
|
||
Protective Solutions
|
|
1,854
|
|
|
494
|
|
||
Corporate
|
|
463
|
|
|
1,439
|
|
||
Total
|
|
$
|
12,008
|
|
|
$
|
32,506
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 4.
|
Controls and Procedures.
|
Item 1.
|
Legal Proceedings.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
|
(a) Total Number of
Shares Purchased
1
|
|
(b) Average Price
Paid per Share
|
|
(c) Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs
2
|
|
(d) Maximum
Number of Shares
that May Yet be
Purchased under the
Plans or Programs
2
|
|||||
4/03/17 - 5/07/17
|
|
6,013
|
|
|
$
|
52.33
|
|
|
—
|
|
|
2,969,611
|
|
5/08/17 - 6/04/17
|
|
231
|
|
|
$
|
51.89
|
|
|
—
|
|
|
2,969,611
|
|
6/05/17 - 7/02/17
|
|
361
|
|
|
$
|
51.33
|
|
|
—
|
|
|
2,969,611
|
|
Total
|
|
6,605
|
|
|
$
|
52.26
|
|
|
—
|
|
|
2,969,611
|
|
1
|
A total of 6,605 common shares were repurchased in the second quarter of 2017 related to shares withheld to satisfy employee tax withholding obligations in association with certain share-based compensation awards. These shares were not repurchased as part of a publicly announced plan or program.
|
2
|
On February 10, 2016, the Company's Board of Directors authorized the repurchase of up to 5,000,000 shares of the Company's common stock. A total of 2,030,389 shares were repurchased under this authorization during 2016 at a cost of $100.0 million. No shares were repurchased during the six-month period ended July 2, 2017. Accordingly, a total of 2,969,611 shares remain available for repurchase at July 2, 2017.
|
Item 6.
|
Exhibits.
|
10.
|
|
|
|
15.
|
|
|
|
31.
|
|
|
|
32.
|
|
|
|
101.
|
The following materials from Sonoco Products Company’s Quarterly Report on Form 10-Q for the quarter ended July 2, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at July 2, 2017 and December 31, 2016, (ii) Condensed Consolidated Statements of Income for the three and six months ended July 2, 2017 and July 3, 2016, (iii) Condensed Consolidated Statements of Comprehensive Income for the three and six months ended July 2, 2017 and July 3, 2016, (iv) Condensed Consolidated Statements of Cash Flows for the six months ended July 2, 2017 and July 3, 2016, and (v) Notes to Condensed Consolidated Financial Statements.
|
|
|
SONOCO PRODUCTS COMPANY
|
||
|
|
(Registrant)
|
||
|
|
|
||
Date:
|
August 2, 2017
|
By:
|
|
/s/ Barry L. Saunders
|
|
|
|
|
Barry L. Saunders
|
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
|
(principal financial officer)
|
|
|
|
|
|
|
|
|
|
/s/ James W. Kirkland
|
|
|
|
|
James W. Kirkland
|
|
|
|
|
Corporate Controller
|
|
|
|
|
(principal accounting officer)
|
Exhibit
Number
|
|
Description
|
|
10
|
|
|
Credit Agreement, effective July 20, 2017
|
|
|
|
|
15
|
|
|
Letter re: unaudited interim financial information
|
|
|
|
|
31
|
|
|
Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and 17 C.F.R. 240.13a-14(a)
|
|
|
|
|
32
|
|
|
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and 17 C.F.R. 240.13a-14(b)
|
|
|
|
|
101
|
|
|
The following materials from Sonoco Products Company’s Quarterly Report on Form 10-Q for the quarter ended July 2, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at July 2, 2017 and December 31, 2016, (ii) Condensed Consolidated Statements of Income for the three and six months ended July 2, 2017 and July 3, 2016, (iii) Condensed Consolidated Statements of Comprehensive Income for the three and six months ended July 2, 2017 and July 3, 2016, (iv) Condensed Consolidated Statements of Cash Flows for the six months ended July 2, 2017 and July 3, 2016, and (v) Notes to Condensed Consolidated Financial Statements.
|
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